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Measuring Cultural Intelligence: Implications and Opportunities Measuring Cultural Intelligence: Implications and Opportunities David C. Thomas Simon Fraser University Abstract Cultural intelligence is an ability that varies with individuals and explains differences in intercultural effectiveness. This ability is difficult to assess, yet managers must be able to measure it in order to determine which employees are talented at working across cultural contexts and with people from different cultures. In this article I describe the development of a new measure of cultural intelligence and how managers can use it to inform and support a number of management decisions such as international staffing and leadership of cross- cultural teams or projects.1 Measuring Cultural Intelligence: Implications and Opportunities Both domestic and international organizations increasingly face a knowledge based competitive environment.2 Concurrently their workforces are increasingly culturally diverse. As a result, the human aspect of management becomes paramount for success. This means employees must be skilled at navigating cultural differences in management behavior and managers must be able to assess this ability among employees. Consider the following situations: The merger of Daimler- Benz with Chrysler Corporation was touted as a “marriage made in heaven” resulting in an automobile company ranked third in the world in terms of revenue and fifth in number of units sold. However it wasn’t long before the marriage made in heaven resulted in divorce. Differences in the cultures and management styles of the two firms proved too difficult to overcome and within 19 months two American CEOs were dismissed and German management took over. Daimler’s management team had tried to administer the Chrysler division Rutgers Business Review Vol. 2, No. 2 205 Measuring Cultural Intelligence as if it were a German company. The resulting chaos caused Chrysler to be sold to a private equity firm at cost to Daimler of around $5 billion.3 Executives of a U.S. technology company have been meeting regularly with engineers of a large Chinese electronics firm to present their idea for a joint venture. They notice that different engineers seem to be attending each meeting and that their questions are becoming more technical, making it difficult for the Americans to answer without giving away trade secrets. Not realizing that such questioning is commonplace in China and considered good business practice, the Americans walk away from a potentially very lucrative deal. In California, a human resources manager sits in her office. She is interviewing candidates for factory work. A young dark skinned man walks into her office after knocking briefly. He does not look at the manager but walks to the nearest chair and, without waiting to be invited, sits down. He looks down at the floor. The manager is appalled at such graceless behavior. Not understanding that this behavior would be perfectly appropriate in the young man’s culture, and even though he is well qualified, he is unlikely to be hired.4 People fail in intercultural situations in all sorts of ways, such as the following: Being unaware of key features and biases of our own culture. Feeling threatened or uneasy when interacting with people who are culturally different. Being unable to understand or explain the behavior of others who are culturally different. Failing to apply knowledge about one culture to a different culture. Being unable to adjust to living and working in another culture. Being unable to develop long-term relationships with people from other cultures. We know that people vary in their ability to deal effectively with the cultural aspects of their environment. However, accurately measuring this ability is a first step to improving and leveraging this skill. The search for that certain global something that makes some individuals more effective interculturally than others has a long history. The search can be traced back at least to the selection of Peace Corps volunteers in the 1960s.5 Based on characteristics thought to help the sojourner cope with new social norms, values and languages past research focused on determining an overseas type. Gradually the focus shifted to a search for appropriate skill or 206 Rutgers Business Review Summer 2017 Measuring Cultural Intelligence behavioral dimensions, which has resulted in the numerous inventories of skills or competencies available today.6 More recently, in a move away from dimensional approaches, international management research has drawn on cognitive theory to provide a link between societal context and behavior.7 By recognizing that cultural differences in what people have in memory drive behavior at different times, we realized that there might exist a more general type of mental ability that influences intercultural effectiveness. The name that has been given to this type of mental development is cultural intelligence.8 Defining and Measuring Cultural Intelligence The measurement of cultural intelligence described here is the result of a decade long program of research by an international team of scholars. It started with a decision about what should be included in its definition and how these elements developed and combined. Cultural intelligence is a system of interacting knowledge and skills, linked by an active attention and awareness to the cultural aspects of the environment called cultural metacognition that allows people to interact effectively with the cultural aspects of their environment.9 Intelligence is commonly defined as the abilities necessary for adaptation to an environmental context. Cultural intelligence is this ability as applied to a specific aspect of the environment – the cultural context. Defining this ability as a type of intelligence has two advantages. First, it substitutes well-studied ideas in cognitive psychology for popular, but less well specified concepts such as global mindset. Second, it indicates that cultural intelligence is separate from the environmental and institutional influences on intercultural effectiveness. Cultural intelligence consists of knowledge and skills developed in specific cultural (intercultural) contexts, but is dependent on the culture general process of cultural metacognition to produce culturally intelligent behavior. Cultural intelligence is an unobservable attribute of individuals but is reflected in its three subordinate facets of cultural knowledge, cross-cultural skills, and cultural metacognition. Its measurement must therefore address these three underlying facets. Cultural knowledge is both specific knowledge about other cultures and general knowledge about the effect of culture on one‘s own nature and the nature of others. Cross cultural skills are those skills that have been shown to have a positive relationship with intercultural effectiveness. These abilities are relational skills, tolerance for uncertainty, adaptability, empathy, and perceptual acuity, all of which must be assessed in a measure of culture intelligence. The final facet is cultural metacognition, which includes a) an awareness of the cultural context, b) conscious analysis of the influence of the cultural context, and c) planning courses of action in Rutgers Business Review Vol. 2, No. 2 207 Measuring Cultural Intelligence different cultural contexts.10 To be useful to management practice it was important to be able to measure cultural intelligence in a reliable and valid manner. The original instrument created to measure cultural intelligence involved a matrix of assessment approaches contained in an on line delivery system. While sophisticated, this measure was very complex to administer and to score, which limited its acceptance and utility. However, based on research conducted with this instrument, it was possible to construct a 10 item scale (called the SFCQ)11 that captures the three elements of cultural knowledge, cultural skills, and cultural metacognition. The validity of the scale was established with 3526 participants in 14 samples and five language groups (English, French, Indonesian, Turkish, and traditional Chinese) around the world.12 The brevity and ease of administration of this new instrument (see Note # 1 for availability of the scale) allows a wide range of applications in international management, as discussed ahead. Cultural Intelligence and Management Behavior Research with the SFCQ shows that cultural intelligence predicts: overall intercultural effectiveness socio cultural acculturation and adaptation the ability to develop long-term relationships with cultural different others the ability to make accurate attributions for the behavior of culturally different others, and job performance in a culturally diverse environment.13 The ability to predict effectiveness in working with people from different cultures and in culturally diverse situations has numerous management implications. First, and perhaps most obvious, is the usefulness of assessing cultural intelligence in selecting individuals for overseas assignments. The costs and high failure rates of expatriates is well documented.14 Yet, many organizations continue to rely heavily on expatriates to carry out critical roles in their international operations.15 The SFCQ’s relationship to outcomes associated with overseas effectiveness, such as the ability to develop long term relationships with people from different cultures, bodes well for its inclusion as an element of the selection process. As with any psychometric instrument it should not be used as the sole predictor of effectiveness
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